Rolling out unit area assessment may land Kolkata Municipal Corporation in trouble

According to rules of the new system (UAA) the civic body will need to give a property owner two months’ time to switchover from the current system of property valuation.Saikat Ray | TNN | December 25, 2016, 09:34 IST

KOLKATA: The Kolkata Municipal Corporation is gearing up to roll out Unit Area Assessment (UAA) system of determining property tax and it may land into a major trouble as far as civic body’s revenue collection is concerned. The KMC assessment department is scheduled to begin the new UAA system from April 1, next year.

According to rules of the new system (UAA) the civic body will need to give a property owner two months’ time to switchover from the current system of property valuation.

A flat or house owner thus will have to submit the self-assessed form by May 31 2017. As soon as the self-assessed declaration from a house owner reaches the KMC assessor online, the process of payment of property tax begins.

However, if an assessee fails to submit the form on time, the civic body will send inspectors who will measure the covered area and other parameters of the house/flat and based on the particulars given, the assessor concerned will compute the amount of property tax under UAA system. Since the exercise will take time, a section of the KMC revenue department officials felt that the civic body would be affected financially to a great extent.

“Since after publication of the scheme only UAA system will be in vogue, our revenue generation for the first quarter will be hampered to a great extent. It is essential that we solve this problem first before publication of the UAA scheme, otherwise we may have to face a financial crisis,” said a KMC assessment department official.

According to an estimate, the KMC may lose revenue from property tax worth Rs 250 crore in the first quarter of the financial year 2017-18 after publication of UAA scheme scrapping the old rent based annual valuation of properties.

A section of the KMC assessment department officials expressed apprehension that without imparting a training to the civic officials on the new UAA system, the entire exercise may prove to be futile resulting in collapse of the revenue collection from property tax.

“We need to train our staff properly for the new system as a section of assessees will need our service under the new system. Failing to do that will lead to a revenue crisis for us since we can’t force the house owners to pay under the old scheme,” a KMC official said.

Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.